Toyota Financial Services Corporate Guide

Toyota Financial ServicesCorporate Guide

TFS, the ESSENTIAL PartnerFirst, I would like to begin by expressing my sincere appreciation toall our stakeholders for your continued understanding and supportover the course of this past year.Yoshimasa IshiiPresident & CEOToyota FinancialServices CorporationToyota Financial Services Corporation (TFSC), wholly owned byToyota Motor Corporation (TMC), was established in July 2000 asa holding company of Toyota’s financial subsidiaries worldwide. Toachieve the TFS Group mission, “Provide sound financial servicesthat contribute to the prosperous life for Toyota customers andothers.”, we aim to attract more customers by providing them withthe finance options to improve their life through car ownership. Wehave expanded our global presence to cover over 30 countriesacross multiple regions and served over 22 million customers as ofMarch 2014. We are deeply grateful to our customers and businesspartners for their ongoing support.We are not satisfied with the present and aim to pursue “RealCompetitiveness” which makes “Sustainable Growth” possible forour customers’ continued understanding and support. We willcontinue our efforts to accomplish a strong and stablemanagement foundation to fulfill our role as Toyota’s captivefinance company no matter how challenging the marketenvironment. To achieve this foundation, we will promoteoperational efficiency through investments in IT and humanresource development. We will strengthen our balance sheet byimproving profitability as well as make efforts to provide financialproducts and services that delight customers. And as our assetsincrease, we will continue to enhance funding, risk management,and operational management to cope with the business risks.We will earnestly continue to support our global vision by helpingall stakeholders ̶ society, customers, worldwide distributors,dealers, investors and employees ̶ achieve a prosperous life.As we move ahead, I look forward to your continued support andcooperation.Thank you.1

Toyota Financial Services Corporation is made up of affiliates in more than 30 countries/locations. Wherever we operate, we conduct business with the highest ethical standardsand a fair and sincere attitude. We aim to have a positive impact in the communitiesin which we operate. Our products and services differ from country to country to meetmarket conditions and regulatory requirements, but around the world we are a companyfocused on delivering quality products that meet our customers’ needs.MISSIONProvide sound financial services that contribute tothe prosperous life for Toyota customers and others.VISIONBecome the Most Admired Sales Finance Companyin the World.THE TFS WAYChallengeSpeedUnity of Purpose2

TFS by RegionAmericas(7 locations)Americas Region“The Americas Region creates value throughfinance and insurance solutions that capitalize onour strong brand, proprietary data, marketexpertise, and the best associates in the industry.Our unwavering commitment to dealer successand exceptional customer service is whatdifferentiates us.”Yoshimasa IshiiPresident, TFS Americas RegionYoshimasa IshiiMichael GroffChris BallingerChris BallingerExecutive Vice President, TFS Americas Region“The closerelationship withTFSM and theirtimely responsemakes ourcustomers havea greatexperience,which is our PresidentGrupo ContrerasMexico3"As the largest auto lender in the United States, and in the Toyota Financial Services organization, TFSUSA drives efficiencies and provides resources which benefit not only Americas Region but also Toyotaentities around the world."Michael GroffPresident & CEOToyota Financial Services USAMarkets At A Glance*We have more than 3,600 associates dedicated to serving over 4.9 million customers, 2,100 dealersand 2,000 wholesale accounts. Combined, the Americas Region has more than US 118 billion inmanaged assets. With sales finance companies in Canada, the United States, Brazil, Argentina, PuertoRico, Mexico and Venezuela, we remain dedicated to taking action on the unique market challengesand opportunities in our business.*As of March 31, 2014Unique Products & ServicesWe are proud to offer unique financial products and services to our customers and dealers, whosesatisfaction is the ultimate achievement. Some examples of our differentiated product offeringsinclude the Wear Pass in Canada, Tire & Wheel Protection in the United States, and Smart Creditin Brazil.Wear Pass(Canada)Tire & Wheel Protection(United States)Smart Credit(Brazil)Toyota Credit Canada Inc.(TCCI) offers leasecustomers a productcalled “Wear Pass” thatwaives most excess wearand tear charges – a firstfor the Americas Region.Customers who elect topurchase this product willavoid unexpected chargesat the end of their lease. Inaddition, customers canhave dents repairedduring the first two yearsof their lease. Withsignificantly fewer chargesincurred at lease-end,dealers find it much easierto transition customersinto a new vehicle.Drivers can avoid out ofpocket costs due to tireand wheel damage thanksto the newest product inTFS USA's comprehensiveline of vehicle protectionplans.Banco Toyota do Brasil’s (BTB) SmartCredit retention program is keepingcustomers in the Toyota family! SmartCredit is specially designed to achieve“Customers for Life.” Existingcustomers receive offers to use up to70% of the equity they have in theircurrent vehicle as they please. SmartCredit messaging directs customersback to their dealer for more detailsand, ideally, into a new car. Whetherthe customer uses the equity topurchase a new vehicle or for anotherpurpose, BTB is providing excellentservice to its most valued customers.TFS Tire & WheelProtection includesreplacement of damagedtires due to road hazards,replacement of wheels ifunable to hold a seal witha new tire, towing, andcoverage of associatedcosts (labor, wheelweights, valve stems, tiredisposal fees and taxes).

TFS by RegionEuropeAfrica(16 locations)Europe Africa RegionIn the Europe Africa Region we have managed to grow our businessand support Toyota vehicle sales by utilizing sound risk managementand implementing new business solutions. We took the globaleconomic downturn as an opportunity to review our business modeland to re-confirm our strategic direction. TFS priorities are threefold.Yoichi TomiharaMiguel FonsecaFirst, by focusing on our core business we continue to support TMCvehicle sales by providing a range of branded contract purchaseand leasing products to Toyota customers, that allow effective management of the customer purchasecycle.This leads to the second element of our business strategy — to enhance our customer relationshipmanagement capability by increasing our customer retention levels and cross-selling additionalproducts.TFS: The EssentialPartner!TFS has once againbeen a positivecontributortowards theEuropean Regiongrowth.This would not bepossible withoutthe strongalignment betweenNMSC's and SFC's.We expect TFSdirect contributionto grow further,whilst we find waysto enhance ourjoint operationswith a “1 1 3”mind-set.There are goodexamples acrossEurope where TFSand NMSC's workclosely together,for mutual benefit.TFS is integratingtheir approach tothe TME strategyin ways that buildsuccess in bothsides of thebusiness.I expect thatworking togetherwe will leverageour hybridleadershippotential, enhanceour UIO & overallsales quality, andmaximize ournetwork growthoutlook. Let's notmiss thisopportunity.Didier LeroyTME President &CEOFinally, the third component of our business strategy is to enhance our used-car business, providing uswith additional financing opportunities and also equipping our dealer network with a new customerbase and incremental income sources.Our focus on Toyota customers’ and the dealer network’s specific needs across the whole life cycle of avehicle will provide a value-add that no independent financier can deliver.Yoichi TomiharaChairman & CEO, TFS Europe & Africa RegionWith a rapidly changing regulatory and market environment, we must continually enhance ourfoundation in terms of funding, compliance and risk management in order to insure our sustainability.At the same time, we must develop our skills in terms of responding to the market challenges from aconsumer and automotive business perspective — supporting the region's sustainable growth strategy.This means improving on our high standards of customer service, and finding every opportunity todevelop win-win products with our NMSC's — leveraging our network power to differentiate frombanks. Trade cycle management, used vehicle and value-chain activities are good examples of thisapproach.We must accomplish this whilst improving our productivity and efficiency — revising processes andadopting adequate digital solutions to bring consumers and Toyota closer together.Miguel FonsecaPresident, TFS Europe & Africa RegionMarkets At A Glance*1,252 associates across 16 locations in Europe and Africa service around 1,641 Toyota and LexusRetailers for whom TFS provides funding exceeding 2.3 billion. In total, our outstanding customerportfolio numbers exceed 1million live accounts representing over 13.6 billion.Trade Cycle Management Focus*As of March 31, 2014Drawing on the products and services that have been developed across Europe Africa Region, we thinktrade cycle management is the best example of how TFS can contribute to the value-chain and make adifference for our customers and dealers.Access Toyota (UK)Access Toyota is a perfect example of how a joint TCM (TradeCycle Management) Program can benefit customers, support bothvehicle and finance sales and increase retailer profitability. Theprogramme is based on four core principles:1. Consumer offer: an attractive consumer offer designed to provideaffordability to Toyota and building a long-term relationship.This is an example on how the NMSC uses theAccessToyota product to attract cash buyers andimprove also conquest. Once captured, AccessToyotacustomers are 20% more likely to be retained and alsochange their cars more frequently.2. Retailer rewards: the long-term relationship with the customer locks infuture profitability.3. Sales training: enabling to communicate the benefits to potentialcustomers.4. Retaining the Customer: there is a strategy in place to retain or renewevery customer. AccessToyota has increased customer loyalty by over100%.4